Purpose: It works in practice, but does it work in theory?
Are you a complete believer in purpose, or is it all bollocks? Pick a side, people, the debate demands.
It was a wryly amusing gag, a few years ago - the big multinational known more for talking than doing, where someone had once questioned the spectacular success of a new business initiative with the words ‘Yes, I can see that it works in practice. But does it work in theory?’
I feel the same about a lot of the conversation around purpose at the moment, which appears to have become entirely binary. Pick a side, people, the debate demands. In the blue corner there are a group of authors and CMOs arguing that every company needs purpose, and that companies that have purpose perform better than those that don’t, - albeit with some key qualifications.
And in the red corner are marketing experts rightly driving a truck through some of the key data or calling the whole thing out as BS. So which side are you on, the ensuing Twitter debate now seems to ask us: are you a complete believer in purpose, or is it all bollocks? Because there is no middle ground.
At one level, the conversation has become characteristic of a general drift towards casting everything as a binary choice, driven by what gets headlines and attention in media of any kind. ‘Sometimes it works, sometimes it doesn’t’ is clearly a less interesting headline than ‘The one sure-fire secret of every successful company’. But it’s frustrating that it’s become the characteristic of people who in other ways are remarkably intelligent.
Because looking at the world around us, as well as the data that is presented and challenged, the answer is pretty clear, isn’t it? It depends. There are some brands and companies for whom purpose or a sense of mission has been very powerful - look, for instance, at our recent interviews with the CEOs of New Balance or the Swedish telecommunications company Tele2, both of whom have overseen significant commercial success in their respective companies over the last few years, and both of whom see purpose as central to their decision-making and focus.
Tele2 Group Net Sales (SEK Million)
When it works, it is because these companies have genuinely committed to it over a period of time (New Balance’s CEO Rob DeMartini has been driving that purpose for ten years now), and used it to filter and drive all their key decisions.
Tele2's Allison Kirkby talks about the purpose every time she mentions a new initiative in the company, her people will tell you. It is always clearly the context and driver she is using for her decision-making - and so it becomes the context and driver for everyone else’s.
In these kinds of companies a strong purpose has soft benefits and hard benefits. It drives internal engagement scores up, and attracts a higher quality of talent, for instance. And it can contribute to the bottom line: Rob DeMartini talks of New Balance growing from $1.5Bn to $4Bn turnover in significant part through the clarity of decision-making its purpose helped give them.
So to comprehensively dismiss the value of purpose makes no sense; you’d have to believe that these highly intelligent, highly commercial leaders were in some way fundamentally mistaken about what had made them successful in the first place. If it works in practice here surely it doesn’t have to work in theory.
But, conversely, that it works in practice in these kinds of companies and brands doesn’t mean it is always the right thing to pursue, or a universally powerful business builder - in theory or practice - for everyone. There are some companies for whom a sense of purpose isn’t necessary (sometimes a bottled water is just a bottled water), and there are some companies for which it doesn’t work, because it never gets beyond the marketing department, and fourteen months later the new CMO comes up with a new one, which atrophies as well. And there are some companies for whom it is commercially successful, but hides an internal ethical reality that bears little relation to its external posture. So it depends.
Search optimisers will tell you that lists attract more attention than other headlines. And this post would get more readers if I had simply entitled it ‘The One Thing Every Business Needs To Know About Purpose’. But let’s not all turn into binary are-you-with-us-or-against-us marketing politicians in search of a good headline.
Purpose can be a powerful driver of business, brands, and teams. And it can also be a glossy but empty promise or, potentially worse, an expensive corporate distraction from greater priorities. Both things are possible. It depends on the people behind the purpose, what is strategically and culturally right for the company, and the degree to which it really guides decisions at every level.
Purpose is not necessarily the only or right focus for the finite energy and resources one has on a brand; if you are a challenger, for instance, there are a number of other powerful ways to position yourself and tell your story that have nothing to do with purpose. But when it’s category-relevant, and linked to commercial clarity, and committed to, it can be very powerful.